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International iron ore prices have shown signs of recovery from the lows recorded in the first weeks of 2024. Beginning in the second half of January, prospects for new economic stimulus from the Chinese government and declining supplies from Australia and Brazil supported an uptick in prices.
In February, things took a more volatile turn. Trade tensions between the United States and China created downward pressure, while adverse weather conditions in Australia and a weakening dollar pushed prices to their highest levels in two months.
However, U.S. President Donald Trump’s announcement of a 25 percent tariff on steel imports cooled the market, driving prices to $105-106/mt CFR in China, up from $107/mt the previous day.
Despite these difficulties, China boosted demand for iron ore as steel mills resumed production activities after the Lunar New Year.
At the same time, supply was reduced due to disruptions in shipments from Australia and Brazil, exacerbated by Tropical Cyclone Zelia, which affected port operations at Port Hedland, Australia’s main iron ore export hub.
The slowdown in supply thus contributed to a further rise in prices, with 62 percent iron ore surpassing $108/mt CFR North China.
Iron Ore 62% Fe CFR – China $/ton – Powered by Commodity Evolution
Ferrous Scrap Market Trends
In the ferrous scrap market, February saw an increase in prices, driven by higher demand from Turkish steel mills and a slowdown in collection in areas of origin.
Despite still weak demand for finished steels, the easing of geopolitical tensions and the removal of export restrictions to Syria have created a cautiously optimistic mood for the Turkish steel market.
A key element in these dynamics has been the Trump administration’s decision to implement a 25 percent tariff on steel imports, a measure that could rebalance global competition but carries with it the risk of countermeasures from trading partners.
International Ferrous Scrap $/ton – Powered by Commodity Evolution
This scenario has prompted Turkish producers to reevaluate their export strategy, particularly to the European Union, where there are fears of a possible tightening of safeguard measures.
Globally, the U.S. scrap market has also seen price increases of between $20 and $50/mt depending on the region. In Europe, the bullish trend involved Germany, France, and Benelux, with increases between €5 and €20/mt, supported by tight supply and growing local demand.
Ferrous Scrap From New Production Scrap ExW – Midwest USA $/ton – Powered by Commodity Evolution
The Automotive Crisis and the Decline in Production
2024 proved to be a difficult year for the automotive sector, culminating in a black December for industrial production. According to ISTAT data analyzed by Anfia, automotive production contracted 36.6 percent compared to the same month in 2023, with a particularly sharp decline of 43.4 percent for passenger car manufacturing.
Overall, about 310,000 vehicles were produced in 2024, marking a decline of 42.8 percent from the previous year.
The sector’s difficulties are also reflected in foreign trade: between January and October 2024, Italian exports of motor vehicles reached 15.1 billion euros, while imports came to 30.4 billion, with the United States as the main destination market (18.9% of exports), followed by Germany (15.4%) and France (11.1%).
Overall, automotive sales declined 26.1 percent in November, with the domestic component down 18.3 percent and foreign at -33 percent.
Future Implications and Outlook
Turmoil in steel commodity markets and the collapse of the automotive sector highlight the fragility of the global industrial economy.
The imposition of tariffs by the United States could have knock-on effects on various sectors, limiting the competitiveness of American companies in favor of European and Asian competitors. On the other hand, the difficulties in the automotive sector require targeted interventions by governments to support technological transition and manufacturing recovery.
Italy, in particular, is facing a decline in overall industrial production, which recorded an index at -7.1 percent in December 2024, while industry turnover fell 5.5 percent in November.
To reverse this trend, a stronger industrial policy is needed, including tax incentives for research and development, subsidies on energy costs and export support measures. In a changing global environment, the interplay between trade policies, commodity dynamics and industrial transformation will determine the future of steel and automotive in the coming years.